Auto Insurance Class NotesIns0313Automobile InsuranceCourse materials.

o Insurance MVA (IMVA)o Regulation under Insurance MVAo Casebook

Changes are anticipated to the IMVA and to the regulations.Is a movement to allow more private motor insurance, but ICBC will still be the only IR providing basic mandatory insurance, it is just the excess insurance that you will be able to buy privately. Regulations change annually (by order in council) – lots of tweaking. So the regulations are much more dense than the statute itself b/c easier to change regulations than take political heat while passing new legislation.

Regulations in force at date of accident are those that apply. Underinsurance coverage is an exception, the regulations in force when the underinsurance coverage was taken out apply for the duration of that policy, unless the legislation states otherwise.

The regulations are a very important part of the course. We should read the entire act and we could be asked about any section of the act. Brown and Menenzies is not a very good source for MVA insurance, it is too Ontario based, but is good for other types of insurance.Gregory and Gregory annotated IMVA and regulations is not too bad. BC MVA and claims practice manual (CLE) is very good.

We do not have to know the following:o Item 4 of the table of contents – interpretation of insurance policies and bad faith. o In the regulations – parts 11 (special policies), part 12 (fleets), part 3 (premiums) – but should

know regulation 19 which deals with principal operators. o The cases at the end of the materials with the 2-3 line description for each just read these

summaries, do not read the entire cases. For example, what are losses incurred in “use or operation” (repairs are, accidental shooting by police officer is).

There are 14 topics that you need to know1. Basis for tort liability – who is liable in what circumstances for injuries in accident and how that

liability relates to the insurance 2. What is a driver certificate and what it does, what restrictions are there, who does it cover p17.3. What is an owners certificate and what it does – who does it insure, for what, what restrictions are

there p18.4. Overlapping insurance coverage. If have one driver insured under 3 polices, which is primary,

which is excess and how much is payable under each. 5. No fault benefits – ICBC may pay some benefits regardless of fault, you just have to be an ID

under part 7. Must know the types of no fault benefits, when they are payable, when they are not.6. Breaches – what kind of conduct is a breach that disentitles ID from indemnity. What is the effect

of the breach on the ID, and on the victim who has a claim against the policy of the ID. 7. Forfeiture and relief from forfeiture, what conduct will lead to forfeiture of what nature of benefits

– s.19 of the IMVA. 8. Hit and run. How are these claims dealt with? What coverage is available and what special steps

must the victim take to maximize entitlement.

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9. Claims against uninsured – s.20. What is a victim of such accident to do, who pays, how much, what steps are required.

10. Underinsured motorist protection (UMP) – s.148.1. This is mandatory coverage, but must know who is covered, for how much, what reductions apply. How is the claim calculated.

11. Third party rights. S.21 of the Act. A victim of an injury has a claim against the motorist who was in breach and so would otherwise not be covered. S.21 gives a COA to the victim against ICBC. What are the limits, what rights does ICBC have when its own ID is in breach.

12. Deduction of no fault benefits. ICBC pays no fault to victims of specified amounts for specified reasons. Then if victim has tort claim against motorist, then the amount of the no fault benefit will be deducted from the judgment against the at fault motorist. S.25 of the act.

13. Limitations (this will be on the exam for sure). This is the most common reason for claims against P lawyers. Regulations and IMVA have limitations, and the limitations act has some, and so does the local government act. Benton case is important.

14. Out of province claims, accidents and IRs. The out of province IR may provide no fault benefits of 5k and that’s all. ICBC provides 150k per insured person. So which provisions apply.

Overview of automobile compensation systems in Canada(Only info on BC is examinable).BC is the only J where victim has unrestrained right to sue motorist for all loss.Maritime provinces have monetary caps for minor injuries. PEI and NB 2.5k. Definition is important, and cap applies to (not death or disfigurement) to all injuries which are not serious and permanent. NS has a low cap as well. Nfld does not have a cap, but have a 2.5k deductible for all claims. Quebec is a pure no fault system – no right to sue. This is a WCB type system. Maximum amounts for non pecuniary amount, and then a big meat chart. Ontario has a “verbal threshold” (description of the threshold, not a number) above which you have an unrestrained action, but have to show that it is a serious injury before you can claim in unrestrained way. Manitoba and Saskatchewan also have no fault scheme.Alta has a 4k cap on minor injuries and a pages long definition of minor injury. So everywhere but BC there have been restrictions on compensation for minor injuries i.e. sore back and sore neck soft tissue claims. 60% of all claims are minor claims. Cost of processing these claims is what drives up the cost of insurance. This is what led to the caps in other provinces. Trial lawyers association of BC is said to be responsible for lobbying against a no fault system and against a verbal threshold or a dollar cap on minor injuries. Trial lawyers association teams up with coalition of people with disabilities, and put pressure on government to not make any changes.

Features of BC’s auto insurance features1. Third party liability insurance if compulsory. This is common in most J’s, but not all of the states

of USA. 2. Is a minimum amount of 200k. That amount is standard across Canada, and has not changed in BC

since 1985.3. There are mandatory benefits that are payable without fault – part 7 of the regulations. There are 5

different types:o income loss up to 300 per week.o homemaker expense = reimbursement up to 145 per weeko medical and rehab up to 150k per insured person.o death benefits o funeral of 2500 per deceased.

These are all part of basic coverage and are no faults benefits.

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UMP of one million is also included in the minimum package.

4. The no fault benefits are deducted from the claim that the ID has against the at fault motorist.

Three situations

No tort claimMust be liability before there will be any coverage. When will there be no tort claim.In own fault accident the driver will have no one to sue, and so will have no tort claim. Pure accident - no one was at fault.Unless the victim can prove negligence, then they will have no tort claim e.g. black ice (unanticipated), could lead to an accident w/o negligence. But if there was a warning on the radio of black ice, then may have been negligent to not have the radio on. If they knew of ice on that road, or that type of location e.g. bridges, curbs in shade, then may still be negligent i.e. will be a high standard to which the reasonable motorist will be held. Child or animal on the road which is not anticipated. But what kind of neighbourhood is it, where there signs etc. Easier to make out the defence when you miss the child, or when you hit the animal (else it gets away and then you have a dodgy story).Bee in the car – this did work once. Unexpected medical problem. (but not if you have been warned against driving).

Pitts Enterprises v Farkes, 2004 BCSC 1493, 2005 BCCA 511. Moose in road. Steering breaks, hits oncoming driver.Oncoming driver recovers from WCB. Kid in the oncoming truck cab was not injured.This claim is for vehicle damage to the oncoming truck. Two more trucks swerved to avoid the mess in the road. D said he was going 90-95 in 90 zone. P says there is a presumption that when you are on the wrong side of the road that there was negligence, and the D must give an explanation that shows that he was not negligent. Debate as to whether it was a known moose area. But RCMP officer says that this area is outside the moose zone, and is not an area known for moose on the road. Less than 1 second from when D saw it until when he hit it. TJ says that cannot expect driver to slow down just b/c there may be animals about, but other factors may point towards slowing down.Not required to drive at a speed that would allow you to bring vehicle to standstill before stationary object even if you were looking out properly. And this moose was black.D was not driving at excessive speed. D was found not negligent. BCCA affirmed, and said all cases were very fact dependent.

Fajardo 2006 BCSC 147Hits moose and knocks the moose into the other lane.Following motorist swerves to miss the stationary truck, hits the moose in the other lane, and gets injured. P says D negligent in hitting moose and in not getting truck off the road.

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Outside moose zone – straight road in good condition. D could not get the truck hazard lights to work – he was in shock and in a daze. P says that there were no lights on in D’s truck.TJ said that D was not negligent in hitting the moose. Was he negligent for leaving the truck on the road – said that should take reasonable care, and was under a duty even though was in shock, and should have moved the truck to the side of the road, and was negligent for not doing so.But if you are really in shock then on an objective standard you may be forgiven – if you were knocked out you would be forgiven, but if you were able to get out and walk around, then you were in a state to move the truck. Defence counsel asked If the truck had been on the shoulder, would you still have swerved? P (dumbass) said yes! So P’s claim was dismissed for lack of causation.

McIntosh 2005 BCAA 64Car goes off road when sees wolf and hits black ice, P was injured. TJ found driver not negligent.

If negligence is not proven, the P still gets the no fault benefits, nothing for pain and suffering, is quite a lot for medical and rehab, some for loss of income. Almost all victims would be an insured and therefore entitled to part 7 benefits. Other than that have to rely on welfare, private accident insurance. P is not entitled to UMP insurance, that is only payable when there is an underinsured motorist, that only applies when there is a legally liable D and he is underinsured.

Hit and runIMVA s.24.The victim has a claim b/c injured by an at fault motorist, just don’t know who it is. s.24 creates statutory COA against ICBC as a nominal defendant.Coverage of 200k all inclusive (interest (pre and post judgment) and costs and for all claims from that accident). Share pro rata if not enough money.Part 7 benefits are still available.UMP is available to the victim. This is not shared pro rata between the three people in the car. Each one can access 1 million of UMP, although part 7 and pro rata share of 200k are deducted. The only way you are not covered by UMP is if you do not have a drivers licence and do not live in a house where someone has a license or a car. So basically everyone gets mandatory UMP.If before the claim is settled, the real D is found, then you must add them as a D and if that is the right guy you will not get the hit and run coverage, but will recover on D’s insurance or if D is uninsured then it would be an uninsured motorist claim, see below.

Uninsured motoristCan be uninsured b/c forgot to insure (accidentally) or actually intended to not pay for it, or if the vehicle is insured, but stolen. The thief is at fault and liable. The owner is not liable b/c is not the driver and the thief did not have consent so no vicarious liability. Even if the thief driver has his own vehicle, he is not covered when driving the stolen vehicle. IMVA s.20 sue the at fault uninsured motorist i.e. thief or forgetful family member. Time limit is two years. Have to also make a claim against ICBC saying that uninsured motorist injured you. The victim will get a judgment against the uninsured motorist. If the uninsured motorist has no assets, then the P will recover from ICBC who will then claim from the uninsured motorist what ever they can.

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ICBC will be required to pay 200k all inclusive, all claims arising out of one accident (as above).The victim will be entitled to part 7 benefits and will be able to claim UMP coverage.

Regular Tort claimsThere may be other D’s besides the owner operator of the other vehicle e.g. car manufacturer for negligent design, garage repairer, highway maintenance contractor (not salting or sanding) should have CGL policies with big limits ($10 million?), province of BC for highway design (posted speed too high etc.)

Claims against vehicle owner: Own negligence of the owner Must prove liability (own negligence, problem with the car that the owner has not repaired e.g. soft breaks, lights broken)Vicarious liability s.86 of MVA possession with consent. No vicarious liability if the driver is not driving within the limits set by the owner, but generally if the owner gives possession then the owner will be vicariously liable. If the driver has an accident then the owners insurance must pay. This is implied if driver is living with the owner “as a member of the family” – designed to provide access to an insurance policy for the victim – so not want dad saying that did not give permission to use the car, family arguments. So have to look at the owners policy do they have the 5 million max that ICBC will give?The owners policy on the vehicle involved in the accident is primary the P will get judgment against the owner and can recover against that policy.72-75% of BC motorist have between 1 and 2 million. 5% have more than 2 million.13% have the minimum. 1 catastrophic injury to university graduate 4-5 million, but could be up to 7.5 million.

Liability against at fault driverHave to prove liability, but apart from moose, negligent operation is not that hard to prove. Sources of insurance coverage:

Driver driving is own car Drivers own owners policy on the vehicle in accident (VIA) – this will be the only policy if it is an owner driver, although they may have excess liability beyond the 5 million ICBC will give you. Could get private insurance that is just for auto coverage or get an umbrella policy.

Driver driving someone else’s car having possession with consent the owners policy on the vehicle will be primary, and that policy also insures anyone that I allow to drive, so they are covered under the owners policy and also under their own policy. Your owners policy insures you not only when you drive your own vehicle, but also when you drive other peoples vehicle with their consent. Then get into the limits game. The drivers own owners policy will only cover any extra that his policy gives that the VIA owners policy does not cover.The driver can also access the liability coverage on the owners policy owned by any other person in the family, but again only to the extent that the coverage provided is greater than that under the VIA owners policy. If the driver was driving a car that was not insured, then he is still covered under his own policy, and under the policy of anyone else in his family.

The driver may own more than one vehicle and have owners policies on both of them. Then can look to the policy in the households with the highest limit. The owner of the VIA cannot take advantage of this kind of family member policy (I think).

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Drivers certificate coverage 200k, and is available only to the extent that it exceeds other coverage available, so if there is an owners policy on the vehicle, then will never benefit from the owners policy. If are single and don’t have a car, and drive another car that is not insured, then this 200k will apply under the drivers certificate. If driving a friend’s vehicle in the USA, then the drivers certificate will help you if he had only 30k coverage. His 30k policy is primary, but then the drivers certificate will chip in 170k.

You can purchase a drivers policy with up to 5 million coverage if you do not want to rely on the insurance that your friend took out on their car.

Resort to Victim can claim up to policy limits.Can also get part 7 benefits and 1 million UMP. If damages of 5 million, and have UMP of 1 million, then get 1 million but then deduct part 7 and deduct the deductibleIf have 200k and damages are 1 million. He was doing two examples here – I did not get them.

Can pay $25 to up your UMP coverage to 2 million.

Statutory provisionsIA has some MV provisions in them, but they will be removed if the anticipated changes come into force.s.9(2) of IMVA says that the IA MV provisions do not apply to ICBC.

s.86 if MVA Vicarious liability of an owner. Problem arises when there is implied consent. Express consent is OK, but with implied consent there is a difficulty where the owner gives consent to the original borrower who then gives consent to the person who is driving at the time of the accident. Is the actual driver in “possession” by the implied consent of the owner.

Godsman v Peck (BCCA)A is the owner of the motorcycle, G is the original borrower and the passenger and the plaintiff, Peck is the operator at the time of the accident. A wanted to sell, gave it to G to test drive over the w/e. No discussion of price or use of the bike over the w/e, other than “if you break it you buy it”.Beer for breakfast.Went to party, Peck wanted to drive it, did not have bike license, but G allowed it. Crash. G was found 40% at fault for allowing Peck to drive. Peck is at fault for the rest.Is A liable for Pecks fault under s.86.Ask: had consent been sought it would have been granted as a matter of course, SCC said that in such case consent can be implied. This is a subjective test.This question was not put to A at trial.TJ said that A had given implied consent, was a casual relationship, they knew each other. BCCA said that A had not given implied consent. A argued that he would not have allowed Peck to drive since he was unlicensed, drunk, inexperienced. BCCA said that look at the willingness and expectation on the part of the owner at the time of the original transfer of possession and consider the circumstances in which the bike actually operated. So now the test for vicarious liability on the basis of implied consent is that you consider if the owner

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o Was willing to allow someone else to driveo That expected that someone else would driveo Was considering the circumstances that actually occurred.

Consider if there has been a prior express prohibition. Has there been a prior use w/o objection. Else is easy for the owner to say that would have objected. Will consider

o If the actual driver is known to the owner.o The age of the actual driver.o Is there a valid reason for the actual driver to be driving.

Rolleman v Blackmon 2002 BCSC 766(not in the case book)Family death claim.Driver admits liability. Driver admits that he did not have consent express or implied, b/c owner expressly forbade him from driving. Question of whether driver was living with and as a member of the family of the driver. Look for elements of permanence, affinity and connection. Here there was no vicarious liability.

For next week read the following sections of the regulations:9, 10, 19, 42-51, 63-66, 77.

Ins0320 Exam

Prop = 40 % Auto = 35% Life and disability = 25%

s.3(2)(a) of limitation act applies and sets 2 year limitation period. The extensions under the LA apply e.g. if P is an infant. 60 day notice period under the local government act. So must ask, is the vehicle owed by the city of Vancouver must give notice to the city / municipality. Must set out the time, place etc. of the damages.

BentonLeading case on limitation provision in IMVA. Did not cover this case, may come back to it later.

MVA s.3(1) must get a license and insure your vehicle, this is where the insurance obligation comes from.

IMVA allows ICBC to grant extension insurance. This is essentially non mandatory coverage i.e. the increase above the 200k minimum, or insurance to insure your own vehicle i.e. anything that is not mandatory.

s.22 of IMVA is unique to ICBC – gives them special protection b/c they are a R corporation. When you issue writ b/c of accident, then in addition to serving the D, you have to serve ICBC. In most cases the chief counsel’s office will send a letter acknowledging service, then to follow the act strictly you could file this in court, but most people don’t bother filing proof of service.

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If Alberta driver hits pedestrian in BC, still have to serve ICBC when P starts the action.

s.28 and s.29 statutory authority for ICBC to require doctors and employers to provide them with information about the P in the form prescribed by ICBC.

If P says that now his neck is not getting better, and now wants to sue.You should

Tell ICBC that any previous authorizations given by the P are revoked Tell the doctor that any authorizations given by the P to release any information are revoked. Ask for disclosure of statements P has made to ICBC Ask ICBC examiner for documents that ICBC got b/c of P’s previous authorizations.

ICBC seems to have stat right to info, but doctor owes duty to keep records confidential. Doctors cannot give out information just b/c ICBC asks for it.

Should tell the examiner, if they want info from the doctor, then you will ask for it, the doctor can send you a letter, and ICBC can then have a copy. Then you should run the letters by your client first b/c the doctor may have made mistakes, which is actually quite common.

s.52-54 of IMVA are also for the benefit of ICBC only liable to pay net past wage loss as defined in s.52 = gross income – tax – employment insurance. But if was a slip and fall, then the past wage loss is calculated without these deductions. This reduces the amounts of claims, and leads too lower ICBC premiums for all drivers. This only applies to designated defendants. “some involvement in the accident” is broad, covers work crews who may not have cleaned up properly after the roadworks, they would be a designated defendant.

Owners certificates.10 of the regulations. Refers to:

Part 6 = 200k Part 7 = missed this one 147 = Inverse liability = don’t worry about it 148 = hit and run not in BC Div 2 of part 10 = UMP

These are all the coverages provided by the owner’s certificate. Hit and run and uninsured motorist claim when the accident occurs in BC, that is s.24 (I think) of the Act. The other provinces have coverage for victims of hit and run that occurs in their province. If are hit by an uninsured motorist in Alta, you will be paid by the Alta uninsured motorist fund.

Appling for an owner’s certificate s.19 of the regulations.Principle operate defined in s.1, is the person who will operate the vehicle the majority of the time. The premium for a vehicle w/o a principal operator Since 2003 you have to disclose the principle operator whether you are applying for a new owners certificate or are renewing an owners certificate. See p65 pamphlet.New drivers are treated equally. ICBC does not discriminate on age or sex. Then if you have accidents your premiums will go up.

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Can get up to 40% discount if you have a good driving record. This is a key issue for ICBC adjusters – after an accident they will ask about vehicle use and who is the principle operator.

Gray v ICBC (p65 of materials)Grey (dad) had insurance. Daughter was using it to deliver pizza. Daughter told adjuster that she was the only one to use the car and that she was paying for it. She also said that she used it most of the time. Father had a 40% safe drivers discount. Dad gave evidence at trial in PC, said that she used it as well, he said she used it more often, but when he used it he used it for longer, and that he did more mileage. Judge found that the person used it more frequently was the principal operator. Then was an appeal in the BCSC.Eventually there was no coverage granted.

Midterm changess.9 of the regulations. Have to tell ICBC of change of address, if there is a change in the territory in which the vehicle will be principally operated. If will be changing use, then you have to give notice as well. For own damage coverage, then you also have to give notice of any change of the location address of the vehicle, which is where the vehicle is at night, this is not necessarily the same as the area where the vehicle is principally operated.

If do not notify ICBC, then is a breach of the regulations and it will be a breach of the K and coverage may be denied.See s.55 of the regs or s.19(1)(c) of the Act.

Partial relief from forfeitureThe ICBC policy on this is in the adjusters claims manual. Not in the materials.

5 breaches1. Use misrepresented2. Wrong territory3. Wrong operator4. Vehicle incorrectly described.5. Deals with garage employees – not relevant for us.

Before March 1, 2002If there is an error in these, then ICBC will give coverage and disregard the error if you pay 10 times the annual premium deficiency, subject to a minimum of 500 and a max of 10k

But then after March 1, 2002Can only have the deal once.No longer applies to 3 or 4.Removed the 10k cap. So now if you get the wrong use or the wrong territory, then pay 10x the diff, subject to $500 minimum, then they will pay the claim.The difference for Grey was $300 – so he would have had to pay $3000 to have ICBC pay the claim.

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Drivers certificates.42.You have one of these if you have a valid drivers license. DC is what gives you part 7 coverage, UMP coverage if you are not covered somewhere else.Part 4 has its own definition of ID – each part has its own definition of ID – beware of this. See definitions for “ID” and “resident”.There is no liability coverage under drivers certificate for a vehicle you own you are supposed to have an owners certificate. Also does not give liability coverage if you are driving a vehicle of your household, b/c household members are supposed to have owners certificate.

Don’t get DC coverage if, s.49(1)(c) – “without the consent of the owner” = stolen. But you do get coverage if you have reasonable grounds to believe that you have the consent of the owner, say b/c you have the express consent of the owners son / daughter / spouse or someone like that.

If you regularly operate the vehicle, then you should check that there is an owners certificate in place, so if you are a regular operator then you do not have coverage under the drivers certificate. s.49(1)(g) no coverage if the vehicle is not licensed, unless you have reasonable grounds to believe that it is licensed. s.49.1(1) tells you that there is 200k of coverage under the DC.s.49.2 priority of claims, consider the following example:Claim = 300kPI = 250kPD = 50kInsurance limit = 200k under the drivers certificate. PD 10% so 30k shortfall.PI 90% so 70k shortfall.So 100 k total shortfall.

If the PD claim was only 10k in total, then would have been more for the PI claim, although the shortfall would be the same.

s.49.3 this is where it says what other coverages there are. s.50 if there is any owners policy, then it is primary. Also, the DC coverage only applies to the extent that it exceeds the owners policy coverage.

So if the owner has 200k coverage, then the DC coverage would not apply. But DC coverage will help in the following cases:

If you drive another persons car that actually doesn’t have insurance on it. If you drive another persons car in another J where the mandatory limits are less than 200k, which

will be the case in many of the states.

You can increase the DC limit by taking out a drivers policy.

Part 6Owners certificate will give coverage in three cases. S.64, 65 and 66.s.64 you get owners certificate and then you and some others have coverage when they drive the described vehicle. s.65 when you and some others drive another vehicle.

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s.66 gives coverage for when passengers in your vehicle operate any part of your vehicle while the vehicle is being operated by you. If passenger grabs the wheel and causes injury, then there is no coverage (I think – notes seem to contradict ) Axa Pacific v Elwood case, in the materials.

s.64There is no coverage if you drive in Mexico.Are four requirements #1 - must be operation by insured. Regulation 63, new definition for ID. Includes household member and when operate with consent. Household is defined in s.1 and does not require that you are of the same family, refers to dwelling unit. A basement suite is a separate dwelling unit. Ministry of Transport for Ontario v Canadian General InsuranceVehicle was used by the entire family. The son could use it when he needed it.Son allowed his friend, Mills, w/o a license to drive the car.Mills, who told the son he had a license, causes accident, P is injured. P gets judgment against Mills. This is an uninsured motorist claim. P was paid by the Ontario uninsured motorist fund, who then sought to recover from the dad’s insurance in the name of Mills b/c they say that Mills had implied consent. The P was already paid, this is just a question of who bears the final bill. 16k judgment goes to SCC. 5 key questions asked of the witness by the judge is what determined the case. SCC finds that there was no implied consent b/c the owner did not address his mind to the question of other people driving the car. Dissent said that the owner left it to his son to make the right decision and should be bound by the son’s decision. Could be a case where the owner is vicariously liable, but the driver was not operating with the owners consent Collorin v. Parker (New Brunswick) (p38)Peters realized the he was too drunk to drive, and that the driver authorized by the owner to drive was also drunk. So sober volunteer drove the car, but caused an accident. 10k claim. Is Parker vicariously liable to the P – yes, the car was still in the possession of the person given permission by the owner.Is the claim covered by the owners policy. Cited Ministry of Transport for Ontario v Canadian General Insurance and found that the driver was not authorized to drive the car by the owner and so the driver was not covered. So owner has to sue the driver (McEwen) to recover the amount that he had to pay to the P. In BC the result may be different b/c if McEwen had a valid drivers license, then he would be driving w/o consent but reasonably believing he had consent b/c he had the consent of the person the owner gave the car to. Also if McEwen owned his own vehicle then he would get coverage under his owner’s policy.

#2 - Must be of the described vehicle.

#3 - Must be in Canada or the US.

#4 – Injury or damage must arise from the use or operation of the vehicle. The vehicle itself may cause the injury or property damage e.g. impacts pedestrian or another vehicle. So this is clearly covered.But what about serial killer that uses car for collecting victims. That is probably does not arise out of the use or operation of the vehicle.

Two tests for whether loss arouse from use or operation.

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Test from Stevenson v Alliance Petroleum = ordinary and well known activities to which motor vehicles are put.Truck stopped and turned off. Then offloading gas, failed to do dip test, gas leaked, fire did the auto policy cover the loss. SCC said that this was an auto risk b/c transporting things is a well known use of vehicles, and this was a gas delivery vehicle. Chain of causation test from SCC in Law Union v Moores Taxi = can you trace a chain of causation unbroken by intervening negligence. Taxi delivered kids to school. Driver supposed to escort the child to the door. Taxi stopped on the opposite side of the road, then did not escort the kid to the door. Kid was injured. Was this an auto risk?SCC said that the chain of causation was broken, the cause of the injury was the breach of K obligation to escort the child.

Fraser Valley TaxiDissent is the better judgment.P in taxi, dropped off by the driver, then P is hit by a car, sues the driver of the taxi and the taxi company. P will be found contributorily negligent and will be several liability, not joint and several, against the D’s. so if only sued the driver, and the driver said that the company was also at fault, then if the TJ agreed that the company was partly at fault, the P would lose out on the amount due from the company. So must sue the driver and the company if you expect to be found contributorily negligent. The company is covered, but who will pay, the auto insurance or the CNS insurance of the company. It was 30 minutes after being put out of the taxi that the P was hit by the car.This was a duty to defend case – which IR has a duty to defend the taxi company. Duty to defend is decided on the pleadings. Dissent said that it was reasonably foreseeable that the passenger would come to harm when put out of the taxi, and that it was an auto risk. Majority said that need negligence in use or operation, and that was not the case here, so CNS had to pay.

Briton Amos v ICBCP driving van in California and his hijacked. P never stopped the car during the hijacking. He escaped the attack but does not know who the attackers are, so can’t sue them.So wants no fault benefits under part 7 from ICBC.ICBC said was injured by shooting, not car accident.Lost at trial and at BCCA, then won at SCC. The no fault section uses the words “arising out of” the same as in regulation 64. This is a broad phrase, is broader than “caused by”.SCC said there is a two part test:

1. Ordinary and well known use of the vehicle. 2. Is there some nexus or causal relation ship, not necessary proximate.

Liability can arise from tortuous act other than use of a motor vehicle. The shooting was the result of the attacker failing to get into the van. The shooting was connected to the use of the vehicle. This case broadened the test.

If was a random shooting at the public generally, and happened to hit a guy in a car, that would not be one that arose out of use or operation of a vehicle.

P62 list of casesIf are doing repairs to vehicle, that is part of use of the vehicle.

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If are disassembling vehicle at the end of its life, that is not repair or maintenance, and is not a loss that arises out of use or operation. Police in police car accidentally shooting someone – that is an auto risk. Hunter shooting another hunter was found to be an auto risk, Herbison case. But the Ontario statute says arising “directly or indirectly”, which obviates the need for causation, and so can be distinguished on this basis. Connolly case: ID is in car, is on medication. Officer starts questioning the ID. ID grabs the officers arm and then takes off. Should ICBC pay the claim? This case said that use or operation includes the intentional tort of using the vehicle as a weapon.Collier case: stag party. Ball and chain worn by the stag. Stag runs away. Collier chases him in car. Then other pursuers on foot catch stag, have fight, harm to stag when he goes through a window. BCCA said that this did not arise from use or operation of the vehicle b/c criminal assault is not a use to which vehicles are usually put, does not pass stage 1. SCC refused leave. Chan case: brick thrown through window of car, then head on with another vehicle. BCCA, considering Amos, said that arose from use or operation of the vehicle from which the brick was thrown, and that vehicle was used for escape, so it was use or operation.

IMVA then added s.19.1 if dominant cause of injury is the use of any weapon or any object other than the vehicle then ICBC is not liable. Still a question of what “weapon” covers. So Amos has been statutorily reversed.

Ins0403

Note about last weeks missed classPast exams always had questions on breaches. That was last weeks lecture which was not actually given, so there will not be a big question on it, but we should still read last weeks notes.

Coverage by owner’s certificates.64 of regs and s.66 of regs cover when others are driving the owners vehicle. s.65(2) is for I or household members are driving a strangers vehicle. If I am driving a strangers vehicle, that owners policy should be primary, and my owners certificate will be excess to the extent that my limits exceed the limits on the strangers owners insurance.

Ditto my owners certificate covers my household members drive the strangers vehicle. What if I drive a vehicle owned by another household member of mine. That policy will be primary, and if I have consent then I am an insured under that policy, but I cannot access the limits of my own policy if the other owner is a household member. This is b/c if any HH member could be covered by the policy of any other HH member, then would have one member of HH insure for 5 million, and then other HH members just take out the minimum. So I am bound by the limits on the other HH members policy.

Stranger = 200kI have 5mHH#1 has 2mHH#2 has 200k.

I drive strangers vehicle, I can claim 4.8m on my policy. When there are multiple HH policies, when I drive strangers vehicle, I can resort to single HH policy, so would obviously take the highest one.

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s.25 of the Act provides for the deduction of no fault benefits. Also entitled to no fault benefits. The no fault benefits are deducted from the tort assessment of damages, judgment is entered against the tortfeasor for the net amount. s.25(2) of Act says that if take benefits you are assumed to have given up the claim to the extent of those benefits. No fault benefits are intended to put money in the hands of the victim early on. Not a lot of money $300, and then medical / rehab benefits are not too bad. If the accident is your fault, then you will only get the no fault benefits. s.25(4) says that amounts of benefits paid must not be communicated to the TOF before they make the award of damages, then make the deduction. Homecare is a no fault benefit, so would subtract this from the judgment. ICBC counsel will confirm how much the P will be entitled to in the future under the no fault program, and how much was given in the past, then the deductions are made. If you are injured by Alta driver, and you were in your own vehicle, then get judgment against that ID motorist, but your no fault benefits come from ICBC. If you were in their vehicle, then Alta would pay your no fault benefits. Three problems

1. How does P counsel protect against the loss of past benefits i.e. those that should have been paid before trial. The LP for part 7 benefits is 2 years from the date of the accident or the last part 7 payment. But the victim may be asleep, but has been going to physio, but never submitted the invoices you netter get those invoices from physio to ICBC quick. If do not get ICBC to pay these, then you will not be able to claim special damages, b/c they were part 7 benefits that you did not claim, and so you cannot get them as part 7 benefits, and will not get them in the tort claim either. So be proactive with the client when it comes to out of pocket expenses – physio, prescription, chiropractor.

2. How do you protect the client against future part 7 expense that is not going too have been incurred at the time of calculation of damages. Say the doctor says you will need a knee replacement, but that it will be minor and will only be off work for a few days, and that it is all covered under part 7. But what if when get to that operation, it takes longer and is more expensive. Then should issue a part 7 writ at the time you issue the tort writ, which must happen in 2 years. Should issue the part 7 writ even if the client has not incurred any expenses yet, so seems like the claim is worth zero, but should still issue the part 7 writ b/c of the danger of a limitation period expiring right at the time the P spends money, so the court will allow that part 7 writ to stand. You must serve the writ within 1 year of filing it – so should issue and serve immediately. Then when you settle the tort action, then you negotiate to dismiss the part 7 writ as well. At this point you can negotiate an amount for the future operation. But if you are afraid about the future operation then you can not dismiss the writ and just wait until the operation and then make the part 7 claim. Other way to deal with this is if you have a good relationship with the adjuster that even if you do not issue a writ, ICBC will not raise a limitation period defence. This is possible, but is quite dangerous. Could argue that ICBC has waived their right i.e. if you get into an argument later.

3. Got the damages from the tort action, and have the prospect of the future part 7 claim, how do you assess the amount that should be attributed to that future entitlement. s.25(5) requires estimate – TJ (not the jury) has to make an assessment of the future entitlement to part 7, and deduct that from the amount of the judgment. The P ideally wants to paid the judgment, including future expenses, now. The P does not want the risk of a deduction being made now, and then have to go to ICBC and ask for those future amounts that were deducted, and then ICBC says that the physio you need now is related to the car accident that the deductions were made for. But ICBC does not want to pay the full future care compensation now. P115-116 of materials Schmitt v Thomson ICBC likes to put off the payment until later, then they can invest the money until it needs to be

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paid. So ICBC would offer undertakings to pay in the future and then the court would make the full deduction. But then courts got weary of doing this. Then the P’s started saying that they wanted the full amount now and that they would not claim future part 7 benefits. But that has now gone out of favour as well. Now Sovani v Jin says that the deduction is the entitlement of the tortfeaser i.e. the tortfeaser is entitled too have the deduction made – even though the tortfeasor is not the one actually doing the payments. But the tortfeasor is keen to have the judgment reduced and they have a right to have this done if there are going to be future part 7 benefits. Depends on whether they are mandatory or permissive part 7 benefits – s.88(1) v s. 88(2). If there is a discretion for ICBC to pay in the future, then court will be court will be less likely to deduct a large amount, but if is a certain payment, then the court will be more inclined to deduct.

There is no longer a requirement that the part 7 benefit matches a head of damage that the P has proved in claiming damages. It used to be, before Gurniak, that needed matching, but no longer necessary. So if the TOF awards only non pecuniary damages, then the amount of the past no fault wage loss does get deducted from the non pecuniary damages awarded.

Hit and Runs.24 of the Act. Read with part 8 of the regulations, which also applies to uninsured motorist claims. This is where it says that the limit is 200k. s.24(1) of the act gives the stat COA to the victim if the loss arose out of use or operation of car in BC and there is a COA against the owner and the driver, and both, or just the driver is not ascertainable, and the owner is not liable e.g. if car was stolen, then owner will not be liable b/c was not driving and was not vicariously liable. Then s.24(1) gives the victim a stat COA against ICBC.

1. Must give notice in time. S.24(2) have to bring the claim with written notice ASAP, and within 6 months. But you may not know that the person responsible is an unidentified motorist within that time. So if the other person was clearly at fault, you may think you have 2 years, but then is found out that the driver of the vehicle had to swerve (reasonably) because “hit and run” driver made him swerve. And then is too late too serve ICBC within the 6 month limit. P123 Jamt v Schurman time for giving notice starts to run when you knew or ought to have known about the unidentified motorist that caused the harm.

2. What is sufficient notice? Must be written. Should send it to claims centre, and give as much detail as possible. Then should have follow up phone call. Courts are lenient in saying the notice are sufficient Goltzman and Hecker cases, p123. In Goltzman the P just told ICBC in a conversation, court said that ICBC could have made more inquiries. In Hecker the damage estimator was told about the unidentified vehicle, and that was good enough.

3. What is the limitation period? 2 years from the date of the accident. s.3(2) of the limitation act applies. Does not matter that ICBC and not the tortfeasor is the defendant. Gibson case, p124. s.24(5) must not give judgment against ICBC unless efforts were made to ID the driver, and that failed.

Leggett (p117). Hit and urn case.Fender bender, then decide that they will look after their own repairs. He does not take her name or address.Then the next morning he gets soft tissue injury symptoms. He goes to the scene of the accident many times to see if he could find her taking the same route. He made various attempts to find her.

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So he decides to sue ICBC, succeeds at trial. TJ says that the time for complying with provisions requiring you to find out who the other party was, arises at the point when you realise you are injured. One of the purposes of ensuring the motorist to find the other person, is to avoid fraud. But there was no fraud here. But the BCCA allowed an appeal. BCCA said that protection of fraudulent claims is only one of the purposes, also want to limit the liability of ICBC, so require P to protect ICBC’s interest like he would protect his own. Provisions only apply to those who could not find the other driver, not those who chose not to.

So there is a reasonably large burden on the P. But there are other cases that are more sympathetic to the P, depends on which judge you get. Lowry is hard nosed. The cases are all over the map – ICBC litigates this issue passionately, b/c they really have no other defence to these types of claims. And then there is the fraud issue.

p123Smoluk writing down wrong license plate was sufficient. Linhares husband lost the note with the license plate number on it, BCCA says that the at fault motorist was ascertainable, P loses. Ingram If you are injured and trapped in the car, then you may be forgiven. If you are a passenger trapped in the car, and the driver does not get the details he should, then the passenger may be forgiven – standard of reasonable steps. Skinglsey did not occur to her to get details – she loses. Becker Must take reasonable steps at the accident and afterwards.If your conduct is reasonable at the accident, but then could have acted better afterwards, then you may be liable.

So you should advertise in a local newspaper, you should go door to door, must report to the police and ICBC ASAP.

4. Mechanics of coverage part 8 s.105, refers to schedule 3 200k. ICBC will not pay as part of hit and run claim any part that is an insured claim. S.107 if your claim is for damage to your vehicle, then to be entitled to have hit and run claim you must report it to police in 48 hours and give it to ICBC.

Uninsured claims s.20 of the Act and part 8 of the regulations. This is when you know the at fault driver, but hey do not have enough coverage. You may just be able to sue the driver who is uninsured, they may have assets, and made a mistake in not getting insurance. If ICBC has to pay for uninsured, then ICBC will then just sue to recover from the at fault party. So the at fault uninsured motorist may well just defend the action. But the P should still put in an uninsured motorist claim. Claimant is a defined term. Uninsured motorist is also defined. There is a standard form that you should use schedule 4, is in stat declaration format. You will know that they are an uninsured motorist if they cannot produce proof of insurance at the scene of the accident. Then you send in the stat declaration then ICBC must, under s.20(3), send a notice to the allegedly uninsured motorist (UIM). s.20(5) ICBC can settle with the P on behalf of the UIM, but then may be limited read the section.

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s.20(6) ICBC must not make payment to P unless … read section. The UIM will normally not want to defend, they will be too poor, and will just ignore the notices. As P counsel you should resist going for default judgment you have to tell ICBC and then they will give the UIM time to rectify the problem, and ICBC will enter appearance and may file a statement of defence, but then if UIM does not show up for discovery, then you may win b/c ICBC will settle with you or consent to judgment against the UIM, and then pay you and then they will be subrogated to the UIM. s.20(17) ICBC will not pay if there is another motorist that is even 1% at fault for the injury of the P. This is b/c there is J&S liability. the other motorist is obliged to have at least 200k in coverage, and that is all that the UIM scheme is required to provide. ICBC does not pay for UIM’s who are joyriders. This is for accidents after July 31 1997. s.19.2(2)(b) says that is no recovery if you should have known that he was a joyrider. The onus is on ICBC to show that the motorist actually was insured so that ICBC does not have to pay the UIM claim. This makes sense if it is a BC motorist – they have access to all of the records. Ozdoba (p126) The onus is more tricky where the vehicle is from California for example, then ICBC will struggle to show that the driver actually had insurance.

The UIM protection is under s.20, is not under the owners certificate. So anyone can claim it – must be a claimant.

Forfeiture of claimss.19 of the Act. s.19(1) has a list of circumstances when claims by an ID are rendered invalid this is when your claim will be forfeited e.g. wilfully false statement w.r.t. a claim, then all claims are rendered invalid. s.19(2) and (3) say when ICBC may and then must relieve against forfeiture. ICBC should relieve when ICBC decides it is equitable. But they must relieve against forfeiture in a case of death or where the victim is permanently incapable of working.

Peterson v Bannon (p139)Peterson is injured when he is a passenger when the driver went off the road. Peterson tells the police that the last thing he remembers are the headlights of an oncoming car that seemed to be on their sides of the car, the driver, Bannon, agrees with this. If so, the Bannon may not be at fault at all, and there would be an UIM claim. But there was no other vehicle, this was a finding of fact. So Peterson got caught in a lie. ICBC then said that this was a wilfully false statement, and that there were therefore no no fault benefits payable. But Peterson would be entitled to no fault benefits regardless of who was at fault. Para 46-47 read this. ICBC has to prove that the statement was wilfully false and that it was material (see para 56). The definition of material para 58, quote from Inland Kenworth case is the statement capable of affecting the mind of the IR in deciding to pay the claim. So do not have to show actual prejudice for the statement to be material. This is b/c otherwise the ID could lie and if not discovered then the ID would win, and if the lie were discovered, ICBC would not be prejudiced, and so ID would be no worse off. Court says that the false statement would not have changed the no fault benefits, but may have affected how they handled or investigated the claim would have wasted time trying to find the hit and run driver.

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Then ICBC applied to reduce the assessed damages that Peterson got by the no fault payments that he would have gotten, even though he did not get them. Finch agreed that the deduction should be made, else allow Peterson to escape from the consequences of his lie.

Brown v ICBC (128)Donuts in the parking lots, crashes into another car. Brown argued that his vehicle was stolen, it was not him doing the donuts. Gets a friend to back up his statement. Then seems that Brown confesses, but this was before the claim was actually filed, although forms had been filled out before. ICBC settles the claim with the injured passenger in Brown’s car for 28k.ICBC says Brown must pay for the damage to his own car. Then there is a claim by Brown for indemnity for the claim by the passenger, and for damage to his own car. ICBC counter claims for the 28k.TJ find that was material false statement w.r.t browns damaged car. But that it was not material to the claim by the passenger. TJ said that ICBC had the correct facts before they knew about the third party claim, and so the lie did not affect the management of the passenger claim. BCCA, Browns does not appeal the damage to the car claim, is now just about the 28k. ICBC argued that under s.19(1) if the ID makes a wilfully false statement anywhere in the claim, then the “all claims” are rendered invalid, so the indemnity claim is also invalid. BCCA rejected that and said that only those claims are invalid w.r.t. which the wilfully false statement was material – prof says that is stretching s.19(1).BCCA goes on to consider if the statement was material to the passengers claim. BCCA says that it was material and that TJ had erred by examining what the IR had actually done rather than what the statement was capable of bringing about. Para 20 is important. Inland Kenworth says that the IR does not have to show prejudice. ICBC says that if the original statement was true then would not have been any payment to the passenger – kinda true b/c then there would not have been an injured passenger and there would not have been a payment under the Brown policy. Also, ICBC does not pay UIM claim to a joyrider. If the vehicle was stolen and the injured passenger was party to the theft, then the driver would not have been insured, and there would have been no claims payable. So that is why the statement was material to the passenger claim, even though the case does not fully explain well.

s.21 – Third party rightsGives a stat COA to a victim against ICBC where the victim has a claim against an at fault motorist for which indemnity would be provided by an owners certificate. Victim has tort claim against the owner driver who caused the injury. S.21 adds to that a stat COA against ICBC. Where a person gets a judgment against someone who has an owners policy and where the judgment is not paid, then this will kick in.It only applies where the is indemnity under an owners certificate, not a drivers certificate, this is an oversight in the act b/c it was modelled on an old act that did not have drivers certificates. s.21(4)(b) no act or default of the ID prejudices the third party claim. Consider that the tortfeasor has coverage but is disentitled to coverage b/c of a breach, then the 3P will still be able to claim from ICBC up to the facer value of the actual limits that the tortfeasor had, but there is one limit, ICBC only has to pay 200k for property damage s.21(5), otherwise ICBC has to pay the full amount under the policy that the defaulting (maybe drunk) driver had.

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So ICBC, where it believes there is a breach by the ID, will tell the ID that he is not covered, and then add itself as a third party to the P’s lawsuit, and then it can defend the action like a defendant could i.e. E4D etc. b/c it is the one that will have to pay the judgment s.21(7-8).ICBC can try and claim the payment to the victim back from the ID, but ICBC will have to prove the breach by the ID. The issue of whether the ID was in breach cannot be tried at the same time as the victims claim even if there is an overlap of issues say s.55(8)(b). Bliefernich v Freeman says that they cannot be tried together.

UMPs.148Part 10 division 2.Who is an ID for UMP purposes owner named in owners certificate and member of HH, holder of drivers certificate and member of HH, occupant of vehicle covered by owners certificate. UIM is defined owner operator who is legally liable but unable to pay. No UMP coverage if there are animals on the road b/c there is no at fault motorist. Insuring agreement is in s.148.1(2). UMP of 1 million is mandatory. There is available an excess UMP policy that gives another 1 million, so the most ICBC will give is 2 million. s.148.1(3) no coverage is provided to an ID who knows that the vehicle is not licensed or is stolen. s.148.1(5) defines coverage. There are certain deductible amounts. If damages are 500k, then you deduct the deductible amounts, and what is left is payable as UMP compensation. There are a list of deductible amounts s.148.1(1) anything that is paid as no fault, hit and run, UIM coverage, owners policy, WCB, CPP, other disability programs. So if got a big CPP pension, then not much will be payable under UMP UMP is supposed to ensure that there is at least 1 million to pay the victim.

Out of province claimsNot examinable.

ExamAuto section will be 4 questions. First question will be multiple parts, next 3 will be fact patterns. Be aware of marks for each question. Often complaints that the exam is long – so write in point form. Can refer to a section # instead of listing the “persons covered”, if that is what the question asks for.

Is there liability – that is always the first question. On the owner – how, direct / vicarious.On the driver – how, what policies apply to the driver.

dw.yule@guildyule.com604 844 5519Will be away at times until the Friday before the exam.

Tony’s sectionLess theory, more problem solving than previous years. Stick to the time limit for each question. May have to look things up on the exam. Don’t phone tony, can try email him – make questions very short.

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